Bitcoin Loses Ground Below $61,000 Despite Federal Reserve’s Dovish Rhetoric
Amidst subtle developments, Bitcoin (BTC) sustains a downward trajectory, slipping below the $61,000 threshold. This downturn coincides with the conciliatory remarks from the Federal Reserve during the recent Federal Open Market Committee (FOMC) gathering, as disclosed in the minutes unveiled on October 9.
At present, Bitcoin is priced at around $60,935, reflecting a 2% drop over the past 24 hours. The FOMC records indicated that a “substantial majority” of participants favored lowering U.S. interest rates by 50 basis points, potentially adjusting the target range to 4.75% to 5%. While a minority argued for a more conservative reduction of 25 basis points due to apprehensions about premature actions, the majority advocated for a larger cut based on recent inflation and labor market statistics. They contended that such a step would fortify economic and labor market robustness while advancing the Federal Reserve’s 2% inflation objective.
Other major cryptocurrencies mimicked Bitcoin’s lackluster performance, with Ethereum (ETH) declining by 1%, Solana (SOL) decreasing by 2.5%, and BNB Coin (BNB) sliding 2.3%. Notably, despite the subdued market activity in the cryptocurrency realm, futures open interest surged post the FOMC assembly.
Conversely, the U.S. stock market responded positively, as the S&P 500 ascended by 0.68%, nearing a record peak, while the Nasdaq index surged by 0.5%, hitting its highest level since the initial September decline.
Andrew Kang, co-founder of Mechanism Capital, underscored the variance in how equities and cryptocurrencies respond to interest rate adjustments. He stressed that equities are more directly impacted by U.S. monetary policy, elaborating that reduced interest rates amplify cash flow value and bolster corporate debt financing expansion. This discrepancy explains the favorable shift in equities compared to the challenges faced by the crypto sector.
Traders seem to be treading cautiously as they anticipate crucial U.S. economic data set to be released on October 10, which could influence their future strategies.
Market Summary
At 9:16 PM UTC on October 9, 2024, Bitcoin retained its lead as the top cryptocurrency by market capitalization, priced at $1.21 trillion with a 24-hour trading volume of $25.74 billion. The broader cryptocurrency market value stood at $2.13 trillion, with a total trading volume of $64.06 billion and Bitcoin dominance at 56.56%.
Wrap-Up
In essence, Bitcoin’s recent descent below $61,000, juxtaposed with encouraging signals from the stock market, signifies a pivotal phase of instability in the cryptocurrency domain. The divergence in performance underscores broader economic considerations and highlights the cautious stance in the market as traders await upcoming economic pointers. Observations from experts like Andrew Kang serve as a reminder of the diverse dynamics shaping investor attitudes and market conduct across different asset categories.
